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New AMA report reviews UK contract cleaning market
''Contract cleaning is a mature and highly fragmented market and one of the most competitive of all the outsourced sectors. Despite the economic downturn and continued budget cuts across private and public sectors, the market has performed reasonably well compared to the wider FM and construction markets and is currently worth around £5.3bn,'' say the authors of the new AMA Research report.
"However, the industry continues to be affected by variable performances in end-use markets - particularly in the public sector where budget cuts, efficiency savings and estate rationalisation measures are impacting on operational costs.
"In other sectors, many clients continue to scale back cleaning budgets, which has led to increased competition within the industry forcing companies to negotiate contracts with very tight margins."
Other key issues driving and shaping the sector include daytime cleaning, the environment and sustainability, legislation, technology/new product development, multi-service provision, infection control, construction activity and output, as well as issues such as wage rates, recruitment, retaining staff and the need for more skills and qualifications within the industry.
In terms of end-use markets, the commercial office sector continues to account for the largest share of contract cleaning services by value, with an estimated 42% value share of the total market - worth around £2.2bn. Other key sectors are local authorities, with around 13% and worth £0.7bn and health with an estimated 12% share.
The market for non-domestic cleaning equipment, materials and chemicals has also slowed since 2008 as a result of the recession and its impact on clients' cleaning spend and is currently worth around £970m. Pressures on both public and private sector budgets are likely to continue for the next couple of years at least, with the need to minimise costs constraining growth in the market to just 1% per annum to 2014 before growth in the sector recovers to stronger levels by 2017, when the market is expected to be worth around £1.1bn
The report also assesses the highly fragmented supply structure for the contract cleaning sector including IFS/IFM and multi-service companies, contract cleaning companies and franchise networks.
The continued squeezing of client budgets in 2013 in both public and private end use sectors is expected to contribute towards little or no growth in the market during the next couple of years, before a return to moderate growth rates of between 2-3% from 2015 to 2017, when the contract cleaning market is expected to be worth around £5.9bn.
'Contract Cleaning Market Report - UK 2013-2017 Analysis', is the 6th Edition of AMA's overview of the contract cleaning market in the UK, focusing on both single and multi-service cleaning activities, as well as the contract cleaning aspect of facilities management. It is available in hard copy or electronic format.
5th September 2013